Back in April I wrote about understanding Indiana inheritance taxes, and yesterday I came across an article written by Steve Maple, an associate professor of business law and tax at the University of Indianapolis and also an attorney and author of The Complete Idiot's Guide to Wills and Estates. Mr. Maple's article, titled Get the goods on estate tax, points out that while the federal estate tax affects less than 5% of estates across the country, "The Indiana inheritance tax can and does affect many heirs."
The article goes on to give an overview of how long it will take to determine how much a beneficiary will inherit - from three to five months if no Indiana inheritance tax will be due, and over nine months if Indiana inheritance will be due - what is taxed - houses, cars, furniture, bank accounts, 401(k)s, mutual funds, stocks and bonds (but not life insurance if there is a named beneficiary) - and what deductions are available to lower the inheritance tax bill - personal representative and attorney's fees, the decedent's debts, funeral and $1,000 of memorial expenses (excluding funeral flowers, dinners, and traveling expenses to the funeral), spousal or minor children allowance ($25,000), and unpaid state and federal income taxes. But if everything is left to a surviving spouse or charity, then no Indiana inheritance tax will be due.
And what is Mr. Maple's advice to avoid the Indiana inheritance tax? "Move to Florida, leave everything to a spouse or charity, or give it away."
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- State Inheritance Tax Chart
- How to Reduce or Even Eliminate Your Estate Tax Bill
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- Update: Do the Rich Move to Avoid Income Taxes and Estate Taxes?
- Would You Consider Moving to Avoid Estate Taxes?
- Indiana Estate Planning & Probate by Arlene Kline, Esq.